Tom Elliott:
Okay, shrinkflation. Now, we all know what it is. You know, you buy a block of Cadbury’s Dairy Milk every week. It costs $5. It used to have 240 grams of chocolate. One day it’s 220 grams, but it still costs $5. Or a packet of chips used to be 50 grams; suddenly it’s 45 grams. You know, 10 per cent less, same price. The federal government is not happy and wants to do something about it. And our next guest, the Assistant Minister for Productivity and Competition, Andrew Leigh. Good morning.
Andrew Leigh:
Good morning Tom, great to be with you.
Elliott:
Well, we know it when we see it but what can we actually do about it?
Leigh:
We’re seeing shrinkflation all over the place. I mean, you mentioned the chocolate example, but it’s happening with chips, it’s happening with confectionery, it’s happening even with toilet paper and detergents. We’re getting on top of it through strengthening the Unit Pricing Code, which is the code that basically tells the big supermarkets what they’ve got to do in order to provide us the right information. So, we’re looking at extending it across more retailers, making sure that the shelf labels compare apples with apples and putting some penalties behind that code.
Elliott:
Yeah. Because I mean, if I have the time, I do look at, you know, the price per 100 grams and weirdly with dishwasher tablets is the price per tablet. Because they’re sold in so many different packet sizes and whatever, it’s very hard to compare them. But I mean, I suppose the issue is most people, and I put myself in this category, you know, we go to the supermarket for quickness and convenience. We want to go and get our stuff and get out, and we probably don’t have the time or the inclination to cross check all the different prices.
Leigh:
Yeah, that’s right. And one of the recommendations that the competition watchdog gave us at the start of this year when we got them to do a deep dive into supermarket competition, is that if the size of the packet changes in a way that’s adverse to the consumer, then there should be a requirement to notify shoppers about that change. So, that’s one of the changes we’re consulting on today.
Elliott:
So it’s not just a price per 100 grams? If a pack of chips have been 50 grams since time immemorial, and suddenly it’s 45 grams you have to have like a yellow sticker just pointing that out?
Leigh:
Yeah, that’s right. Or if you take a couple of biscuits out of the packet and try and get the price the same. You’d have to tell people about it. So, the consultation has kicked off today. It’ll be going until the 19th of September. People can jump on the Treasury website if they want to have their say.
Elliott:
So, we’re not going to ban shrinkflation, but we’re going to make it more obvious when it occurs.
Leigh:
Yeah. It’s a market economy. People will charge the prices they’re going to, but our big supermarkets have a lot of market power Tom, as you know. Much more than in many other countries. So, we think that approaches such as the Unit Pricing Code are appropriate, and we need to look at strengthening those in the interest of shoppers.
Elliott:
So, when will these consultations finish and when will the new code come into force?
Leigh:
Consultation wraps up on the 19th of September and then we’ll kick on with the reforms. And it’s part of a whole tranche of things we’ve been doing for supermarkets. Cracking down on price gouging, strengthening the Food and Grocery Code so farmers get a fair deal and giving another $30 million to the competition watchdog so they can monitor the big supermarkets even better.
Elliott:
Okay. Now I want to ask you about another thing and thank you for coming on to talk about shrinkflation, which is a massive issue. I agree. It’s just difficult to police and unfortunately a lot of people don’t have the time to recognise it until they get home. But I don’t know if you’ve seen this report in the Indian Financial Press. Indian government Minister Piyush Goyal has said that he is deep in negotiations to build a million new homes in Australia. They’re going to get $500 US billion of funding. They’re going to bring Indian workers into Australia to build all these homes. As a member of the federal government, have you heard about this or are these discussions occurring?
Leigh:
No. Look, I’m not aware of it. It would be Don Farrell who has carriage of any of our trade negotiations. Our main focus Tom, has been on getting more tradies into construction through measures such as the apprenticeship bonus for construction tradies, which has $10,000 in incentive payments through the life of the apprenticeship in order to encourage people to do carpentry, electricals, plumbing, locksmiths and trades like that.
Elliott:
But if the Indian government sort of came to your government and said, we’ve got the funding, we can build a million new homes, you can use your tradies but we’ve got some to come over and help, I mean, would that be even considered?
Leigh:
Look, it’s the first I’ve heard of it so I don’t have any sense as to those hypotheticals. I do know what we have been doing, which is putting a whole lot more resources into building more homes, working with the states and territories to cut through the thicket of regulation and getting more tradies onto the tools with bigger apprenticeship bonuses. That’s how we’re looking to tackle the housing supply problem.
Elliott:
All right. Thank you for your time. Andrew Leigh there; Assistant Minister for Productivity and Competition.